Newspaper and magazine share tips

By This Is Money
Updated: 15:00 EDT, 17 June 2011

Each day we round up share tips from national newspapers and investing magazines. For the Mail on Sunday's stock picks, read the Midas column.

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FRIDAY

Investors Chronicle

Renew Holdings may have suffered from the sharp slowdown in construction markets in 2009, but it has recently turned its performance around by refocusing the business. First-half results for 2010-11 showed a 12% increase in revenues and a 32% leap in underlying operating profits. The group's order book was 16% higher at £334m. Profit margins also improved from 1.2% to 1.4%. Buy.

Majestic Wines might be in a tough consumer environment, but it has gone from strength to strength under the leadership of its chief executive, Steve Lewis. The chain has been helped by the removal of competitors including Unwins, Oddbins and Quench. Results for 2010-11 revealed a 26% increase in underlying pre-tax profits. However, over the past two years its share price has surged, so many shareholders will be sitting on handsome gains. It may be sensible to realise them before reality catches up with that rating. Sell.

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The Daily Telegraph

After a period of underperformance, shares in Kenmare have started moving again. The titanium miner is developing a 50% expansion project at its flagship Moma mine. Kenmare says it has negotiated significant price increases with customers for 2011, which should improve margins significantly. In the year to December, revenues rose to $91.6m from $26.7m and the pre-tax loss narrowed to $16.3m from $30.4m. They are up 153% since September 2010 compared with a FTSE 100 up 4%. Buy.

Shares in Dignity, the UK's only listed funeral director and crematoria operator, have had a good run recently. They have been sliding in the past week, and now it looks like a good time to bank profits. In its recent trading update, Dignity said revenue rose 9.6% to £59.1m in the 13 weeks to April 1. Underlying operating profit rose to £22.6m from £20.4m in the equivalent period of last year. Shares were 538p in May 2009 and are up 39% compared with a market up 30%. Sell.

The Independent

Victoria revealed its preliminary results yesterday, and it conceded it was seeing the toughest environment for years. The floor coverings manufacturer saw UK revenues rise 9%, helped by a jump in sales of 25% over the past 3 months. Its larger Australian market posted an increase in revenues of just 2.1%. The overall result was a 77% rise in pre-tax profits, justifying Victoria's statement in May that its figures would come in ahead of expectations. Buy.

On the fact of it, Premier Farnell is doing okay. The distributor of electrical products yesterday reported adjusted pre-tax profits of £28.5m, up 13%. The performance of the UK showed revenues up 16%, and in the US revenues were up just 5% but profits surged by 52% thanks to a sharp improvement in margins. Overall, adjusted profits and revenues fell some way short of City forecasts. In Asia-Pacific, revenues fell 3.7% mostly due to problems in Singapore and Malaysia which dragged figures down. Avoid.

The Times

Premier Farnell's share price has risen by more than 50% since the start of 2010 before it fell yesterday by 9%. Sales in the first quarter to the end of April grew by 8%, adjusting for disposals, and pre-tax profits by 13% to £24.1m. Operating margins across Premier Farnell as a whole stagnated at 11.3%, the same as in the previous financial year. The shares at 252p are on less than 13 times this year's earnings, while the strong balance sheet allows the prospect of higher dividends at a yield that could approach 5%. Hold.

MediaCorp, an internet advertising and gaming company, rose 3.3% to 1.55p after winning a contract to provide all adverts for Digital Sports Group's websites, including footymad.net and golf.co.uk. XCAP Securities, Media Corp's broker, said that the deal was worth £1.5m a year to the AIM company, whose directors bought shares. Buy.

THURSDAY

Shares Magazine

Cineworld looks oversold on fears over weak consumer spending at 192p. Last week's surprise departure of finance director Richard Jones added to the gloom. Cinema box office takings are up 60% year-on-year. The UK box office is firmly in recovery mode and is now down 2.5% so far this year compared with the same period last year. Buy.

The momentum behind agricultural and retail group Wynnstay ahead of interims (22 June) is set to show a continuing positive trading trend. The Wales-headquartered company is benefiting from its broad spread of agricultural activities, while its retail operations are showing relative resilience. In a record year to last October, Wynnstay delivered 22% growth profit before tax to £6.2m on turnover up 13% to £243.7m. The market valuation is underpinned by £47.3m of net assets, equivalent to 287p per share. Buy.

The Daily Telegraph

The performance of European Goldfields might be poor, but it is tipped to buy. The investment is speculative, as its short-term performance hangs on an announcement by the Greek authorities. Should Goldfields gain approval for its gold mines from the Greece, the share price will move higher. It is likely approval will be granted, as the debt-ridden nation would benefit from the 1,000 jobs it would create and £500,000 of investment. Shares are trading on a December 2012 multiple earnings of 211, falling to 9.8 in 2013. The shares are up 70% since March 2009, compared with a FTSE 100 up 53%.

The appointment of Andy Inglis, BP's former head of exploration and production, will be a boost for Petrofac. The company has ambitious plans to double the earnings from 2010 levels in five years as part of a new division called Integrated Energy Services. Other business units are growing strongly and are expected to deliver double-digit earnings growth. Citigroup increased its target on the shares to £20 yesterday morning. Petrofac shares are up 224% since March 2009 compared with a market up 55%. Buy.

The Times

Petrofac shares have experienced almost straight-line growth over the past year. The company, which services a quarter of all UK oil and gas production, has said that by 2015 it will double its basic profits from 2010. Much if the company's growth will come from a new Integrated Energy Services division, which hopes to offer national oil companies a place for training and engineering. This one is an interesting play on the continuing share of oil. Buy.

Rio Tinto is accelerating its production of iron ore from Western Australia, after news that global consumption of metals and minerals over the next 30 years will exceed that of the past 10,000. Although this may not be welcomed by environmentalists, Rio is accelerating its production to 333m tonnes by 2015. The price of iron ore has risen from $60 a tonne in 2009 to $170 a tonne. The company has already announced $5bn in share buy-backs this year. Hold.

The Independent

Mouchel will shine over the long term. Government talks of deficit reduction have led to a challenging short-term outlook for the engineering consulting and services group. Shares remain affordable at 59.75p, down by 8.75p. The market's reaction offers a good opportunity to buy into a company that we expect to regain its composure once the short-term pressures have passed. Buy.

Ted Baker had a 62p jump in its share prices on Tuesday, but the fashion brand has not had any eventful updates since. The leap forward came after it delivered a 15.2% jump in revenues for the 19 weeks to 11 June, boosted by new store openings in Manchester, Paris and Hong Kong. Further good news came from Ted Baker maintaining its margins at a time when many retailers are discounting heavily. Its shares trade on a forward earnings multiple of 18.1, which makes us cautious for now. Hold.

WEDNESDAY

The Daily Telegraph

Tesco's share price has improved over the past couple of months, albeit slightly. Despite there being no sign of a turnaround in the fortunes of its UK business, Tesco's international business is showing good growth in the first quarter. Asian sales grew 8.6%, Europe was up 9.5% and the US business Fresh & Easy saw sales soar 21.9%, although it is still not profitable. Current figures see revenues rise 9% this year and pre-tax profits rising 11%. Shares were first recommended in December 2008 at 329.25p and are up 24% compared with a market up 35%. Buy.

It's not been all doom and gloom for BHP Billiton. Industrial production data from China is very strong and enough to offset fears about inflation in the Asian nation. BHP shares have fallen by 12% since they hit a record high of £26.31 in April. This week, strikes at its coal operations in Australia's Bowen Basin have started, and over 400 workers downed their tools. Current consensus is for pre-tax profit of about £20.7bn. The shares are trading on a June 2011 earnings multiple of 9.1, falling to 7.7 next year, and the yield is 2.5%. The shares were tipped as a buy in January 2009 at £19.95 and they are now up 16%. Buy.

The Times

Despite the slow progress of Oxford Instruments in finding acquisitions, the maker of high-tech devices posted a strong set of numbers yesterday. Sales for the year to the end of March were up 23.4% in North America, 40.5% in Asia, and 70.1% in China. This left Oxford with revenues 24% ahead at £262m and pre-tax profits up 120% to £26.2m. The shares are on a high 17 times this year's earnings. Buy.

Park Group is certainly worth a punt after it announced pre-tax profits up 33% this year to £7m. The company launched a flexecash scheme last year, which although still in its infancy, has prospects for the corporate market. The company can afford to raise the dividend by 29% to 1.7p, with a final payment of 1.2p. The dividend looks set to rise further and the shares yield up a prospective 3.8%. Arden Partners speculated profits could double over five years. Buy for a long-term return.

The Independent

The Eurasian Natural Resources Corporation (ENRC) has had a tough few weeks. The annual general meeting saw four directors leave the board, two of whom were voted out. Until plans for a governance review are finalised, which is expected to take three months, the market is likely to remain cautious. This month will see the expiry of the US quantitative easing programme, and we could be in for a period of underperformance as traders reassess the commodity outlook. Sell.

Stockbroker Arden Partners Indian arm has brought some large companies as clients, and Arden is becoming the first port of call for Indian businesses looking to raise cash in London. Brokers like Arden are having a tough time at the moment, as commissions are being squeezed and activity is limited. Earlier this year Arden came up with a trading update 32 times analysts' forecasts. It should be borne in mind that these shares are some way off recent highs and there are grounds for thinking that Arden can deliver. A speculative buy.